BiggerPockets

Not to far from where I live is a house that is abandoned and boarded up. (I live in Canada) I know that I am going to have to find either the owner or contact the bank. I am 22 and a beginner in real estate investing. My plan was to buy, fix and sell, but I was wondering if it were possible to get money at closing to cover the mortage until I can get it sold in the spring of 2009. Can anyone give me more insight on this?

Originally posted by Dan O'connor

David,


I suggest that you get the "goods" on the property first before you worry about locating purchase money.

Very True Dan, so many people including myself figured that an abandoned house would be an easy catch. All deals require some sort of nurturing before materializing. Get your numbers THEN find financing, however, it's never a bad idea to find out what type of financing is available.

Abandoned and boarded up houses are a real crapshoot. Go inside and inspect. If you don't know construction hire some professionals. You will probably be apalled at the rehab costs.

You will most likely need to pay cash for the house, unless you can work out a deal with the seller. Then, if you're still in love with the house, use your credit card to finance the rehab.

There is a great deal of land surrounding the house. Would it be an even better idea if I could get the house really cheap, knock it down and build another larger house in replacement?

How much is a "great deal" of land? Is it enough to think about knocking down the house and subdividing into building lots for a developer?

Yikes! Guys, he is 22 and a new investor!

Wheatie is asking some good questions. How is your real estate market? What is average length of time on market before a property sells? Do you know what the property would sell for fixed up? Do you know how much it would cost to fix up? Do you have the skills to do the rehab or will you have to hire someone? How tight is lending in your area? Do you have a good credit record? Do you have contacts for private lending?

This is probably not the project to begin your career with, tho you may be able to joint venture with someone more experienced. I would definitely get a look inside the place and work through all the numbers. It may still be a good deal and you may move forward with it. But do your homework, get comps for the property.

I am a big fan of buying a property with additional land if I can subdivide the land, sell off the lot(s) and use that money to finance the rehab. You may be able to do that, which would be cool.

Sorry to sound like your mom, but I would hate to see anyone crash and burn on their first project and give up on real estate. This may still be a great deal and you may do it, but you need to get a lot of answers before you put any money down.

Feel free to ask questions along the way. I would love to hear more about the property and how you are doing.

Barbara